North Texas Eyes Arkansas Lake Water Supply
Businesses relying on North Texas water service should watch an Arkansas approval process that could add a major new supply source.
Updated on Nov. 2, 2026 in Utilities
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Should North Texas cities buy water from Arkansas to meet growing demand?
The North Texas Municipal Water District is exploring a purchase of excess water from Millwood Lake in Arkansas, with informal talks held with Heartland Water Partners, a portfolio company of Dallas-based private equity firm Grey Rock Investment Partners. Formal contract terms have not been discussed, and the interstate sale would require approvals before any water could move.
Why it matters
North Texas utilities face a growing supply gap as their service area expands, so securing new sources is a near-term operational priority. The proposal is being weighed as one strategy to meet future needs in a region where demand is rising faster than existing supply.
The North Texas Municipal Water District serves 2.4 million people across more than 70 communities and 2,200 square miles. The potential Millwood Lake supply could provide up to 110 million gallons per day, while the district will need more than 400,000 acre-feet of new supply by 2080.
The players
North Texas Municipal Water District
A wholesale water, wastewater and solid waste provider serving 2.4 million people across more than 70 communities in North Texas.
Heartland Water Partners
A water-supply company owned by Grey Rock Investment Partners that holds exclusive access to excess Millwood Lake water pending approvals.
Grey Rock Investment Partners
A Dallas-based private equity firm whose portfolio includes Heartland Water Partners.
Texarkana
The Arkansas city whose board approved the first step toward transporting and selling its Millwood Lake water.
The details
Water moving from Arkansas to Texas requires an application reviewed by the Arkansas Natural Resources Commission and approval from the Arkansas General Assembly. Heartland Water Partners was recently granted exclusive access to excess water in Millwood Lake, contingent on those approvals. The point of delivery into the NTMWD system has not been identified and would be determined during contract negotiations. Excess surface water released from reservoirs ordinarily flows into the Gulf, which is part of the rationale for capturing it.
Timeline
October 22, 2025: NTMWD board passed a resolution to entertain additional water supply opportunities.
Late October 2025: Texarkana board approved the first step toward potentially transporting Millwood Lake water.
2080: NTMWD service area is expected to double in population.
Market Landscape
The proposal reflects how Texas utilities are looking beyond in-state sources to meet projected demand, as measured against the most recent Texas State Water Plan. Interstate transfers of this kind require approval from the source state, which makes the Arkansas review a gating step for any comparable deal.
Businesses that depend on water service in North Texas should track whether the district's supply strategy changes rate structures or capacity planning in the coming years. Operators in water-intensive industries should monitor how the Arkansas approval process develops, since it will set the timeline for any new regional supply.
The takeaway
Utilities planning for multi-decade growth are increasingly looking at interstate and out-of-region supply, which makes regulatory approval timelines a core planning variable. Operators should watch the Arkansas Natural Resources Commission review as the signal of whether this supply moves forward.
Further reading
For context on how regional providers plan for supply, see Utilities coverage on this site.
Source note: This article includes information reported by The Dallas Morning News.
Live Poll
Should North Texas cities buy water from Arkansas to meet growing demand?
